Macys Supply Chain Overview and Performance Measures
Macy's, a renowned company founded in New York in 1858, has an extensive supply chain including production, procurement, distribution, and inventory management. They have implemented eProcurement applications to enhance efficiency in production and distribution. Performance measures involve comparing pre and post eProcurement values, production expenditures, and customer satisfaction. The focus is on transforming retail stores into multi-channel fulfillment centers to improve distribution efficiency. Accurate product listing and delivery time measurements are key aspects of their supply chain strategy.
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Presentation Transcript
Macys Supply Chain Name Class Professor
Macys: Company Background Founded in New York 1858 At the beginning of 2013, this corporation had 798 locations across the country It currently sells a broad range of products including clothing, house wares, jewelry, and furniture The company has a net income of $893 million and has more than 167,000 employees
Basic Supply Chain Components Production and Procurement Distribution Inventory Payments
Macys Supply Chain Overview: Production On October 25, 2010, Macy s implemented an eProcurement application to its stores (Slick 2010) This allowed consolidation of vendors and the ability to negotiate better prices. It also allowed the Purchase Manager to save money
Performance Measures: Production Compare the net value of the company before the implementation of eProcurement and after eProcurement Compare previous production expenditures to current production expenditures Issue customer satisfaction surveys that will reward the customer a 10% discount on their next visit for completing it
Macys Supply Chain Overview: Distribution To increase efficiency of distribution, Macy s is in the process of turning 292 of its retail stores into multi-channel fulfillment centers (Scdigest, 2012) This will provide an enhanced shopping experience for online customers as well as in-store; if items are out of stock in one location, they can be delivered from the nearest store that has it available. In addition, whereas out of stock items would be labelled as such online, they will not be if the item is available in one of the fulfillment center stores. New technology will be implemented that will help all the stores keep track of what items are located where
Performance Measurements: Distribution To ensure that the supply information listed in stores and on the website is accurate, a randomized counting of one product should be conducted in all of the stores; the actual product number should be compared with the online posted product number to determine accuracy To determine the effect that this process has on delivery time, the average time it takes for a product to reach the customer before implementation of this method and after implementation of this method should be measured; if these times are not comparable or better, additional steps should be taken to ensure timely delivery To ensure that customers actually like this feature and this is not a waste of company time, statistics should track how frequently store to store or store to online delivery is used.
Macys Supply Chain Overview: Transportation Since Macy s needs to remain competitive with other large retailers, it s constantly reviewing and optimizing its transportation methods (Gonzalez, 2011) Historically, the company has focused less on rate of transportation and more on transportation accuracy on both domestic lands and shipments from overseas The company is expanding its DC bypass capabilities
Performance Measurements: Transportation The average time it takes products to reach the United States from overseas should be calculated before use of the DC bypass method; these numbers should be compared to the transportation time after implementing and perfecting the method The average time it takes products to reach local stores from the warehouse and retail fulfillment centers should be calculated before use of the DC bypass method; these numbers should be compared to the transportation time after implementing and perfecting the method The accuracy and efficacy of transportation should be examined by tracking the amount of products that could be obtained in each shipment overtime
Macys Supply Chain Overview: Payments Macy s strives for their customers to have the most satisfying experience; therefore most of its payment systems are electronic Most of the transactions that occur between Macy s and its vendors are now also electronic thanks to the new eProcurement system Although Macy s retail stores accept cash, the online store accepts cash in the form of Visa or PayPal in addition to credit purchases
Performance Measurements: Payments Macy s should examine the efficacy of electronic versus non-electronic payments to be sure that going electronic is the most efficient aspect of this business To determine which electronic payments are the most effective, the store should compare times it takes for them to get their payment through different modes, such as PayPal versus Visa versus credit Macy s should issue a survey that ensures customers like paying electronically and it is their preferred method
Summary Macy s is using eProcurement to enhance purchasing and procurement Multi-channel fulfillment centers will be used to increase distribution efficacy DC bypass will be implemented to increase rate and efficacy of delivery The company is shifting towards digital payments and similar technologies to increase payment efficacy and the overall customer experience
References Gonzalez, A. (2011). Macy s Focuses on Supply Chain Efficiencies to Outperform Competition. Logistics Viewpoints. Retrieved from http://logisticsviewpoints.com/2011/06/22/macys-focuses-on-supply- chain-efficiencies-to-outperform-competition/ Scdigest. (2012). Supply Chain News: Logistics Savvy May Determine Multi -Channel Success, as Macy's Revamps Fulfillment Network by Empowering Stores. SC Digest. Retrieved from http://www.scdigest.com/ONTARGET/12-05-23- 1.php?cid=5861&ctype=content Slick, A. (2010). eProcurement Part of Macy's Magic. Verian. Retrieved from http://www.verian.com/2010/10/eprocurement-part-of-macys-magic/
